African entrepreneurs can be in vanguard of energy, transport revolutions

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It may sound crazy, but there is a man that says by 2030 fossil fuels will be defunct, and 100 per cent of the world’s power will be supplied by renewable sources such as solar and wind.

The same man predicts the same disruption in the transportation sector, with electric, self-driving cars changing the way the world moves in much the same way as did the invention of the gasoline engine.

Sound a little outlandish, especially from an African perspective? Well, maybe it is. But the theories are being taken seriously by many if only because they are those of Tony Seba, a Stanford University lecturer who in the early 1990s predicted the huge growth of the internet at a time when few foresaw its eventual size.

So will Africa be lagging behind as this predicted disruption takes place? Quite the opposite, actually. The continent has a history of leapfrogging certain technologies, and when it comes to energy (especially solar) and transportation, the continent’s entrepreneurs are already readying Africa for the shift, should Seba turn out to be correct.

Governmentally, South Africa has lead the way in preparing for solar power, with leading global authority Wiki-Solar last year reporting the country had moved into the top ten countries worldwide in terms of its use of solar energy.

But entrepreneurially speaking, it is East Africa that is doing the most. In a region blighted by lack of access to electricity – only 23 per cent of Kenyans, 10.8 per cent of Rwandans and 14.8 per cent of Tanzanians respectively have access to the grid – a number of startups are making waves by rolling out affordable access to solar. In spite of being only two months old, Disrupt Africa has already reported on a number of these companies and the progress they are making.

Earlier this week it was announced Kenyan startup M-KOPA Solar had become the first company from Sub-Saharan Africa to win the Zayed Future Energy Prize, and will use the US$1.5 million winnings to launch a training and development programme called M-KOPA University.

M-Kopa Solar launched in 2012 and provides ‘pay-as-you-go’ energy services for off-grid customers. So far its business model has brought clean, affordable solar power to 150,000 homes in East Africa, and sales have reached a pace of 500 or more per day.

Other companies are seeing similar growth. Ugandan startup SolarNow, which has secured US$3 million in investment, sells solar systems to rural households and businesses with an 18-month credit facility in order to make them affordable.

“There is an enormous unmet demand for solar energy. Market penetration is below three per cent and competition is in most regions absent,” said co-founder Willem Nolens.

The startup has 45 branches covering almost the entirety of Uganda, and plans to expand to at least one other East African country in 2015, having so far sold 6,100 solar systems.

Another East African solar provider benefitting from investment is Tanzania’s Off Grid Electric, which secured US$16 million in funding last year, with more investment into African solar set to follow from the likes of the US-Africa Clean Energy Finance (ACEF) initiative, Dubai-based Access Power and French renewable energy investment firm EREN, and the City of Johannesburg.

“We have the potential to change 1 billion lives by making solar accessible and affordable to everyone,” Off Grid Electric chief executive officer (CEO) Xavier Helgesen said.

Another Tanzanian company, Juabar, is taking a slightly different approach, designing and building solar charging kiosks before leasing them to a network of entrepreneurs who use them to offer electricity services. The company currently leases out 30 kiosks to Tanzanians.

“We see Juabar charging kiosks as the beginning of an energy ecosystem in which we develop engaged, skilled community members who can facilitate electricity access in their communities, first with mobile phone charging and then as demand grows they can add on additional service to meet community needs,” said founder Sachin DeCou said.

It is not just in solar energy that Africa seems to be more prepared than many might have thought should Seba’s bold predictions comes true. Again, on a macro scale, South Africa leads, with BMW set to launch its electrically-powered i3 hatch in the country this year, to compete with the Nissan Leaf.

But at a more grassroots level Africans are proving they are not only ready to adapt to Seba’s brave new world, but also help design the technology to enable it to happen. Applications are currently open for the Innovation Challenge organised by automotive parts supplier Valeo. The contest is a global one, but excitingly student teams from Egypt and Nigeria make up over 10 per cent of applicants, while there are many more African submissions from the likes of South Africa, Kenya, Tanzania, Uganda, Botswana, Mozambique, Malawi, Senegal, Liberia and Ghana.

The competition challenges the students to create equipment to make cars “smarter” by 2030 in order to win the EUR100,000 (US$116,000) top prize.

Regardless of whether Seba’s bold predictions on the near future of energy and transportation are proven right, the positive news is that African entrepreneurs are ensuring the continent is not left behind in this brave new world. Whereas in the past, Africa may have been one of the last to benefit from new technological advancements, it is now in the vanguard, with young Africans creating these innovations themselves and set to benefit from their future uptake.

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Passionate about the vibrant tech startups scene in Africa, Tom can usually be found sniffing out the continent's most exciting new companies and entrepreneurs, funding rounds and any other developments within the growing ecosystem.

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